Spending dispute leaves a Senate deal elusive

Spending dispute leaves a Senate deal elusive

1of2Noreen Grimm, holding a George Washington portrait, along with husband David Grimm protests the closing of the U.S. National World War II Memorial because of the government shutdown.Photo: Alex Brandon / Associated Press

2of2Noreen Grimm stands next to her husband David Grimm, both from Pittsburgh, Pa., holding a portrait of President George Washington during a rally at the World War II Memorial in Washington Sunday, Oct. 13, 2013. The rally was organized to protest the closure of the Memorial, subsequent to the shutdown, and lack of access to it by World War II veterans, who traveled there on Honor Flight visits. Leaders in the Senate have taken the helm in the search for a deal to end the partial government shutdown and avert a federal default. (AP Photo/Alex Brandon)Photo: Associated Press

WASHINGTON — With a possible default on government obligations just days away, Senate Democratic leaders — believing they have a political advantage in the continuing fiscal impasse — refused Sunday to sign on to any deal that reopens the government but locks in more budget cuts for next year.

Their refusal extended the stalemate that has kept much of the government shuttered for two weeks and threatens to force a federal default.

The core of the dispute is about spending, and how long a stopgap measure that would reopen the government should last. Democrats want across-the-board cuts known as sequestration to last only through mid-November; Republicans want them to last as long as possible.

Democrats said that Sens. Harry Reid of Nevada, the majority leader, and Mitch McConnell of Kentucky, the Republican leader — who spoke only briefly by telephone on Sunday — were inching forward and that a breakthrough was possible before the default deadline Thursday. McConnell did not even travel to the Capitol on Sunday.

“They had a good conversation. They are moving closer together, and I'm hopeful the Senate can save the day,” Sen. Charles Schumer of New York, the No. 3 Democrat, said Sunday evening.

Republicans accused Democrats of accepting nothing short of capitulation without offering anything in return. “The Democrats keep moving the goal posts,” said Sen. Susan Collins of Maine, one of the lead Republican negotiators. “Decisions within the Democratic conference are constantly changing.”

Sen. John McCain, R-Ariz., warned on the CBS News program “Face The Nation” the Democrats “better understand something.”

“What goes around comes around,” he said, “and if they try to humiliate Republicans, things change in American politics.”

A rally on the National Mall, led by Sen. Ted Cruz, R-Texas, and former Gov. Sarah Palin of Alaska, was intended to show that tea party activists — supporters of the House Republicans who forced the shutdown over their opposition to the health care law — were in no mood to give in. Some waved Confederate flags and called for President Barack Obama to be impeached.

But many Republicans who once said they would only finance the government if the president's health care law was gutted are in full retreat. A Senate bipartisan framework drafted by Collins and Sen. Joe Manchin III, D-W.Va., started with a face-saving repeal for Republicans of a tax on medical devices that helps pay for the Affordable Care Act. When Senate Democratic leaders objected, that was tempered to a two-year delay of the tax. Republicans had insisted on tightening income verification rules governing access to the health care law's subsidized insurance exchanges. Now Democrats are rewriting that language as well.

Once the government is reopened and the threat of default is lifted, Democrats have agreed to formal budget negotiations, where, they acknowledge, Republicans may have the upper hand. Both sides say they want a deal that reduces the deficit over the long term and shifts some budget cuts to programs that are essentially on autopilot like farm subsidies and Medicare.

Republicans have one advantage: If no deal is reached during those talks, the next round of automatic cuts, even deeper than the first, go into force Jan. 1.